Until the global financial crisis in 2008, corporate treasurers were often considered solely the custodians of cash. In many cases - particularly in the ‘third sector’ – that’s the role ascribed to ‘the treasurer’ today. Of course, that wasn’t ever true in many leading businesses in the UK and internationally, but it’s taken time to address the stereotype. Indeed, in many developing markets the role remains less understood and practised.
Most surveys of corporate treasury tend to focus on functional activities and product use but as a Chartered professional body, the ACT has bucked this trend with our annual research programme, now known as the Business of Treasury , the only international survey of qualified treasurers by a professional treasury association.
One element of the research that’s developed over the 6 years it’s been running is how treasury has become an essential pivot between the all things financial (markets, investors, risk) and all things business (strategic direction, investment) both internally and externally.
Here’s a simple (and simplified) example:
Historically beyond initial equity, business used to rely on bank facilities and occasional forays into the debt capital markets for funding, usually fixed rate, medium term (5-7 years) and issued via one or two of the house banks. And then back to the ivory tower.
Today however treasurers worry about global issuance markets, global fx and interest rate risk (and hedge accounting), stakeholders, mixed tenors, financial automation, diversifying the investor base, cyber security, regulation and much more.
What does it mean for the treasury role?
Well, our research highlights that two components of modern treasury have become critical for treasurers. The first is that a treasurer’s job is now at least as much about communication and interaction as about technical knowledge. Inside an organisation, treasurers are talking to almost all their colleagues – from marketing and sales all the way to the Board – almost all of the time. What are they talking about? Here’s the second point: they’re talking about pretty much everything and anything that affects business, finance, strategy and growth.
How will this affect treasurers in the future?
More than ever treasurers, whether experienced or just starting on their careers need to enhance ‘soft’ skills with technical ones, they need to learn the language of business not just of treasury and they will need a 360° understanding of the challenges their businesses face.
